The decision to become a consultant is both exciting and empowering. The ability to work for yourself, to choose your clients and projects, and to be your own boss are benefits that just about everyone aspires to have someday.
Don’t let the initial excitement keep you from building a strong and straightforward business though. Often, the decisions that you make in the beginning can affect your success, and failure, in the future.
Aside from the basics, such as planning your finances and developing a legal business, your contracts are one of the most important pillars in your business. What you lay out for clients in the beginning can shape not only your relationships with them, but also your reputation as a professional.
When creating a freelancing or consulting agreement, you should make sure that you cover all of your bases. In this post, we’ll outline some of the essential aspects that you should have in writing, and what you should make sure to communicate to your clients before adding your John Hancock.
Financial Information in a Consulting Agreement
Before deciding on a fee, you’ll likely meet with the client at least once or twice to determine the parameters of the project, what their budget looks like, and how you expect to be paid. You’ll also get a feel for their business needs, and what, if anything, you need to be aware of when making your contract.
Within any contract, you should always discuss and include the following:
- What your fees are, and how and when you will be compensated
- If you will charge late fees, and if so, how much they will be
- What forms of payment are acceptable
- Inclusions for costs outside of the project, such as travel expenses, additional consultants, program requirements, etc.
Not only should you discuss these things with your client before signing a contract, you should also make sure that you are receiving fair compensation and that the contract is clear and concise, especially when it comes to details regarding payment.
Important Dates in Freelancing Contracts
Dates are another important aspect of your contract, since they dictate the length of responsibility that you and your client have for each other. The most important dates to cover are:
- The start and end date of the contract
- Payment dates
- Project milestones, for example: the first draft is due on May 31st, 2015
- Length of any non-disclosure or confidentiality terms
- If the contract will renew, and when
- When you, the consultant, will provide invoices to the client
It’s also important to ensure that you have clear termination terms included in your agreement. This means a designated notice period, such as 30 days, and how notice must be given (in the form of an email, phone call, text, etc.).
Creative Terms in a Consulting Contract
When it comes to your work as a consultant, it can be hard to find a fit between your rights to the work, and those of the client.
One way to ensure that both you and the client are satisfied is to include a clause in the contract confirming that you may use the work in a professional portfolio, on a website, or elsewhere. Let the client know that while they will have full rights to the finished work, you will still be able to claim professional credit for your involvement.
Professional Details for Freelancers to Include
While you might not feel like you are a business yet, you should start out treating yourself as a successful professional so that you set a straight path for the future.
You may be willing to work on weekends or evenings, or to do some extra time on a holiday, but don’t make your clients believe that you are at their beck and call. Instead, set business hours for yourself, and let the client know what they are.
You may not be busy in the beginning, but you will be once you start getting referrals. Keep your family and work life separate, and expect your clients to treat you like a business, not an employee.
Also let your client know how and when they can contact you. Some contractors don’t answer work related phone calls or emails after a certain time in the evening, and some make themselves available at all hours. How much you choose to be available is dependent on your industry, and your personal capabilities.
Just remember that once you set your availability, it’s hard to change, so it’s best to think about the future and your long-term preferences instead of what works when you are just getting started.
Defining Consultant and Client Responsibilities
While all contracts generally cover whose responsibilities are what, it’s a good idea to clearly detail what is expected of both parties. If the client want invoices done a specific way, they should make this clear. If the consultant requires extra payment for certain tasks, this should be specified in the agreement.
This keeps future issues from arising and makes sure that you both know what you need to do or provide in order to fulfill the agreement.
Discuss, Initial, Sign
The best way to make sure that you and the client both understand the requirements within the contract is to meet and go over each point individually. At the end of each page, you should both add your initials and the date. Once you get to the last page, talk about the contract overall, confirm your responsibilities, and sign away!
Your clients will appreciate how thorough you were, and you’ll start gaining a reputation as a professional, thoughtful, and transparent business owner.